STOCK PURCHASE AGREEMENT
among
BATTERIES BATTERIES, INC.
("Buyer")
W.S. BATTERY & SALES COMPANY, INC.
("WSB")
and
THE STOCKHOLDER
OF WSB
("Stockholder")
Dated January 3, 1997 as of December 31, 1996
TABLE OF CONTENTS
PAGE
----
ARTICLE I-SALE AND PURCHASE OF STOCK ................................. 2
1.1. Sale and Purchase of Stock......................... 2
ARTICLE II-PRICE AND TERMS............................................ 2
2.1. Consideration...................................... 2
2.2. Possible Repayment; Determination of the
Closing Combined Net Worth....................... 3
2.3. Closing............................................ 3
ARTICLE III-REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER......... 4
3.1. Organization and Qualification of WSB.............. 4
3.2. Capitalization..................................... 5
3.3. Transfer and Title to the Shares................... 5
3.4. Authorization of Agreements; No Violations......... 5
3.5. Financial Statements............................... 7
3.6. Tangible Assets.................................... 7
3.7. Intangible Assets.................................. 7
3.8. Books and Records.................................. 8
3.9. Accounts Receivable................................ 8
3.10. Contracts and Commitments.......................... 12
3.11. Liabilities........................................ 13
3.12. Litigation......................................... 13
3.13. Permits, Licenses, Etc............................. 13
3.14. Taxes.............................................. 14
3.15. Absence of Certain Changes or Events............... 14
3.16. Employee Benefit Plans; ERISA...................... 16
3.17. Insurance.......................................... 18
3.18. Compliance with Applicable Law..................... 18
3.19. No Consents........................................ 19
3.20. Full Disclosure.................................... 19
ARTICLE IV-REPRESENTATIONS AND WARRANTIES OF BUYER.................... 20
4.1. Organization and Qualification..................... 20
4.2. Authorization of Agreements........................ 20
4.3. Authority to Buy................................... 20
4.4. No Consents........................................ 20
4.5. No Violation....................................... 21
4.6. Litigation......................................... 21
4.7. Securities Law Disclosures......................... 21
4.8. Full Disclosure.................................... 22
ARTICLE V-CERTAIN ADDITIONAL AGREEMENTS............................... 22
5.1. Retention of Trustee; Liquidation of Stockholder... 22
5.2. Transfer Taxes..................................... 22
5.3. Resignations....................................... 23
ARTICLE VI-REMEDIES................................................... 23
6.1. Survival of Representations and Warranties......... 23
6.2. Indemnification by the Stockholder................. 23
6.3. Indemnification by Buyer........................... 23
6.4. Claims for Indemnification......................... 24
6.5. Right to Defend.................................... 25
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6.6. Limitations........................................ 25
6.7. Litigation; Remedies Cumulative.................... 26
ARTICLE VII-MISCELLANEOUS............................................. 26
7.1. Expenses........................................... 26
7.2. Further Actions.................................... 27
7.3. Commissions and Finders' Fees...................... 27
7.4. Knowledge of WSB................................... 27
7.5. Injunctive Relief.................................. 27
7.6. Further Assurances................................. 28
7.7. Reformation and Severability....................... 28
7.8. Entire Agreement; Modification..................... 28
7.9. Notices............................................ 28
7.10. Waiver............................................. 29
7.11. Binding Effect; Assignment......................... 30
7.12. No Third-Party Beneficiaries....................... 30
7.13. Headings........................................... 30
7.14. Counterparts....................................... 30
7.15. Governing Law...................................... 30
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT, dated January 3, 1997 as of December 31,
1996, by and among BATTERIES BATTERIES, INC., a Delaware corporation, c/o
Founders Management Services, Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Buyer"), W.S. BATTERY& SALES COMPANY , INC., an Illinois
corporation with offices at 0000 Xxxxxx, XxXxxxx, Xxxxxxxx 00000 ("WSB") and
XXXXXXX X. XXXX AND XXXXXXX XXXX AS TRUSTEES OF W.S. BATTERY & SALES CO. INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST at the foregoing address in McHenry,
Illinois, an Employee Stock Ownership Plan ("ESOP"), within the meaning of
section 4975(e)(7) of the Internal Revenue Code, as amended, (hereinafter
referred to as the "Stockholder").
WHEREAS, the Stockholder is the record and beneficial owner
of all of the issued and outstanding shares of the capital stock of WSB;
WHEREAS, WSB is engaged in the business of the assembly,
packaging and wholesale and retail distribution of batteries (collectively,
the "WSB Business"); and
WHEREAS, the Buyer desires to acquire the assets of WSB and
the WSB Business through the acquisition of the outstanding shares of the
capital stock of WSB and the Stockholder desires to effect the sale of the
outstanding capital stock of the WSB to the Buyer.
WHEREAS, simultaneously with the execution and Closing
hereof, the Buyer will be acquiring pursuant to a Stock Purchase Agreement
(the "BN Stock Agreement") among Buyer, Battery Network, Inc. ("Battery
Network") and Messrs. Xxxxxxx Xxxxxx Xxxx and Xxxxx Xxxx and Xx. Xxxxx Xxxxxx
(collectively the "BN Stockholders"), all of the outstanding capital stock of
Battery Network, Inc. ("Battery Network") into which Alexander Battery Co.
East, Inc., Alexander Battery Co. South, Inc. and Alexander Battery Co. West,
Inc. (collectively the "Merged Companies") were merged effective December 12,
1996 pursuant to an Agreement and Plan of Merger dated December 1, 1996, and
Battery
Acquisition Corp. ("BAC"), a subsidiary of the Buyer will be acquiring
substantially all of the assets of WSJ Enterprises Inc. ("Enterprises")
pursuant to an Asset Purchase Agreement among Buyer, BAC, Enterprises, the BN
Stockholders, Xxxxxxx X. Xxxx ("WS Senior") and Xxxxxxx Xxxx (the "Enterprises
Asset Agreement" and the foregoing named individuals along with the BN
Stockholders are collectively hereafter referred to as the "Enterprises
Stockholders").
NOW, THEREFORE, in consideration of the premises and the
mutual agreements, covenants, representations and warranties hereinafter set
forth, the parties agree as follows:
ARTICLE I
SALE AND PURCHASE OF STOCK
1.1. Sale and Purchase of Stock. Subject to all of the
terms and conditions set forth in this Agreement the Stockholder is hereby
selling and transferring and delivering to Buyer, at the Closing (as defined
herein), and Buyer is hereby acquiring from the Stockholder, 500 shares of
Common Stock constituting all and not less than all the outstanding shares of
the Common Stock of WSB, no par value of WSB (the "Shares").
ARTICLE II
PRICE AND TERMS
2.1. Consideration. Subject to the terms and conditions of
this Agreement, in reliance on the representations, warranties and agreements
of WSB and the Stockholder contained herein, and in consideration of the sale,
conveyance, assignment, transfer and delivery of the Shares, Buyer shall
deliver or cause to be delivered to the Stockholder in full payment to the
Stockholder for the sale, conveyance, assignment, transfer and delivery of the
Shares at the Closing $2,000,000 in the form of a wire transfer of federal
funds to a bank account designated by the Stockholder at McHenry State Bank,
XxXxxxx, Illinois in the amount of $2,000,000; such payment to be subject to
adjustment as provided in Section 2.2.
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2.2. Possible Repayment. In the event the amount by which
the Closing Combined Net Worth as determined pursuant to Section 2.2 of the BN
Stock Agreement (the "Closing Combined Net Worth") is less than $8,000,000
(the "Deficiency") and such Deficiency exceeds the required payment , if any,
under Section 2.2(b) of the BN Stock Agreement by the BN Stockholders and
Section 2.1(b) of the Enterprises Asset Agreement, the Stockholder shall
promptly repay to the Buyer the amount of such excess in the form of a
certified check in the amount of difference to the order of the Buyer.
2.3. Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the time
and at the offices of Brock, Fensterstock, Xxxxxxxxxxx, XxXxxxxxx & Xxxx, LLC,
One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m. on
January 3, 1997 (the "Closing Date")."
(a) Deliveries by the Stockholder. At the Closing, the
Stockholder shall deliver and shall cause to be delivered to Buyer (unless
delivered previously) the following:
(1) the stock certificate evidencing the Shares,
duly endorsed or accompanied by a duly executed stock power
or powers transferring the ownership to the Buyer;
(2) the written consents of third persons required
pursuant to Sections 3.10 and 3.11 other than leases of
certain equipment specified on Schedule 3.11;
(3) the opinion of counsel in the form of Exhibit A
hereto;
(4) the resignations of the Directors provided in
Section 5.3; and
(5) all other previously undelivered documents,
instruments and writings required to be delivered by the
WSB or the Stockholder to Buyer at or prior to the Closing
pursuant to this Agreement or otherwise required in
connection herewith.
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(b) Deliveries by Buyer. At the Closing, Buyer shall deliver
to or on behalf of the Stockholder (unless delivered previously) the
following:
(1) the wire transfer of funds referred to in
Section 2.1(a) hereof;
(2) the opinion of counsel in the form of Exhibit
A-1 hereto; and
(3) all other previously undelivered documents,
instruments and writings required to be delivered by Buyer
to the Seller or the Stockholder at or prior to the Closing
pursuant to this Agreement or otherwise required in
connection herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
To induce Buyer to enter into this Agreement and consummate
the transactions contemplated hereby, the Stockholder and WSB jointly and
severally represent and warrant to Buyer as follows:
3.1. Organization and Qualification of WSB. WSB is a
corporation duly organized and validly existing under the laws of Illinois,
the only jurisdiction where it owns property or conducts business except for
jurisdictions in which the failure to do so would not in the aggregate
adversely affect the combined financial condition (the "Combined Financial
Condition") or combined results of operations (the "Combined Results of
Operations") of Battery Network, WSB and Enterprises. WSB has the corporate
power to own its assets and to conduct its business as it is presently being
conducted. Copies of the Certificate of Incorporation and the By-Laws, each as
amended to date, of WSB have been previously delivered to Buyer and are
correct and complete. WSB does not own any equity interest in any other
corporation.
3.2. Capitalization. The authorized capital stock of WSB
consists of 500 shares of common stock, no par value, all of which are issued
and outstanding; and there are no shares of the
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capital stock of WSB held in its treasury. The Shares are validly issued,
fully paid and nonassessable and owned of record and beneficially by the
Stockholder. Neither WSB nor the Stockholder has executed or granted any, and
there is, no outstanding, option, warrant or other right or any agreement
(other than this Agreement) of any kind providing for the purchase, or the
right to purchase, issuance, sale or other disposition of any shares of
capital stock or security convertible into or exchangeable for such shares of
capital stock of WSB.
3.3. Transfer and Title to the Shares. The Shares are being
sold to the Buyer free and clear of any outstanding liens or encumbrances.
Upon delivery of the Shares to Buyer at the Closing, the Buyer will receive
good and marketable title to the Shares, free and clear of any lien, pledge,
option, contractual right, equitable right, charge or other encumbrances of
any kind whatsoever.
3.4. Authorization of Agreements; No Violations.
(a) This Agreement has been, and the instruments and
agreements contemplated herein, (collectively, the "Related Instruments") and
other agreements and documents to be executed in connection with the closing
of the transaction contemplated hereby (the "Closing Documents") will have
been, at the Closing, duly executed and delivered by WSB and the Stockholder
and constitute the valid and binding obligations of WSB and the Stockholder;
and the Agreement, and each of the other Related Instruments and Closing
Documents at the Closing will be, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and except to the extent that
the remedy of specific enforcement or injunctive relief is subject to the
discretion of the court before which any proceedings therefor may be brought.
(b) The execution and delivery and the performance of this
Agreement, the Related Instruments and the Closing Documents do not, and will
not, with or without the giving of notice and/or the passage of time:
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(i) violate in any material respect any provision
of law applicable to WSB and the Stockholder or the
corporate charter or By-Laws of WSB;
(ii) violate, conflict with, result in the breach
or termination of, any provision of, constitute a default
under any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which WSB or the
Stockholder is a party or by which WSB or a Stockholder or
any material asset or property of WSB is or may be bound
(the "Binding Agreements") or give any party other than the
Stockholder or WSB the right to accelerate any material
obligation thereunder, except where such violation,
conflict, breach, default or termination would not have a
materially adverse effect upon the WSB Business or the
Combined Financial Condition or Combined Results of
Operations the transferability or value of the Shares; or
(iii) result in the creation of any lien, charge or
encumbrance upon the Shares, or upon any of the properties
or assets of WSB pursuant to any of the Binding Agreements.
Neither such execution, delivery and performance nor
compliance by WSB or the Stockholder with the terms and
provisions hereof will violate any law or, with or without
the giving of notice and/or the passage of time, conflict
with or result in a breach of any judgment, order,
injunction, decree, regulation or ruling of any court or
other governmental authority to which WSB or the
Stockholder is subject or by which any of the assets of WSB
or the Shares may be bound.
3.5. Financial Statements. The Stockholder, along with the
BN Stockholders, has caused to be delivered to Buyer: (i) the Combined Balance
Sheet of Battery Network, and WSB and Enterprises as of September 30, 1996,
December 31, 1995 and December 31, 1994 and their combined statements of
income, cash flows and Stockholder's equity for the nine months ended
September 30, 1996 and for each of the years ended December 31, 1995, and
December 31, 1994 accompanied by the
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unqualified report of Deloitte & Touche, independent public accountants
(collectively the "Audited Financial Statements"). The foregoing financial
statements fairly present the Combined Financial Position of Battery Network,
WSB and Enterprises as of September 30, 1996, December 31, 1995 and December
31, 1994 and the Combined Results of Operations of Battery Network, WSB and
Enterprises for the nine months ended September 30, 1996 and the years ended
December 31, 1995 and December 31, 1994. The Audited Financial Statements have
been prepaid in conformity with GAAP, consistently applied. The Closing
Combined Net Worth is at least $8,000,000.
3.6. Tangible Assets. WSB does not own any real property.
Schedule 3.6 hereto is a complete and correct list of each material item (a
book value of at least $25,000) of tangible personal property (other than
inventory) and fixtures of WSB, all of which were included on the September
30, 1996 Combined Balance Sheet, and all of which are currently used or
useable in the conduct of the WSB Business and are in the aggregate in good
condition and repair, reasonable wear and tear excepted.
3.7. Intangible Assets.
(a) Schedule 3.7 identifies all patents, trademarks, trade
names, service marks, copyrights, registrations or applications with respect
to any of the foregoing, renewals or assignments, and all rights in, to, or
respecting such renewals and licenses or rights under the same presently
owned, being used, or presently intended to be acquired (identified as such)
by WSB (collectively referred to herein as the "Business Rights"). To the
extent indicated in Schedule 3.7, the same have been duly registered in the
offices indicated therein. There are no claims or demands of any other person,
firm, corporation or entity of which WSB and the Stockholder is aware
pertaining to any of such rights; and no proceedings have been instituted, are
pending, or, to the knowledge of WSB and the Stockholder, are threatened,
which challenge, oppose or threaten interference, cancellation, nullification
or concurrent use with any of the Business Rights. To the knowledge of WSB and
the Stockholder, none of the Business Rights infringed on or otherwise violate
the rights of others or are being infringed on by others; and none
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are subject to any outstanding order, decree, judgment or stipulation. No
licenses, sublicenses or agreements pertaining to any of the Business Rights
are in effect, other than as set forth in Schedule 3.7. Neither WSB nor the
Stockholder has been formally charged with infringement of any adversely-held
Business Right with respect to WSB or any Business Right used in connection
with the WSB Business.
(b) WSB owns and possesses all Business Rights which, to
the knowledge of WSB and the Stockholder, are necessary for, and being used in
the conduct of, or in connection with, the WSB Business as was conducted on
September 30, 1996 and as is currently being conducted; all are in full force
and effect and have not been amended or modified. Except as set forth in
Schedule 3.7, WSB has not sold, assigned, transferred, licensed, sublicensed
or conveyed all or any interest in any of the Business Rights to any person,
and has the right, title and interest (free and clear of all security
interests, liens and encumbrances of every nature) in and to the Business
Rights set forth on the Schedule.
3.8. Books and Records. The books and records of WSB have
been maintained on a basis consistent with prior years and accurately reflect
the basis for amounts set forth on the financial statements delivered pursuant
to Section 3.5 and to be delivered pursuant to Section 2.2.
3.9. Inventory. All of the inventory of WSB included on the
September 30, 1996 Combined Balance Sheet and the Closing Combined Balance
Sheet is of a quality and quantity currently usable in the ordinary course of
WSB Business. The present quality of all current and usable inventory of WSB,
after giving effect to any inventory reserve established in accordance with
GAAP, is at a level consistent with the past practice of WSB.
3.10. Contracts and Commitments.
(a) Except as set forth in Schedule 3.10 or Schedule 3.11,
on the date of this Agreement:
(i) WSB is not a party to or bound by any
distribution agreement, sales representative agreement,
dealer agreement, collective bargaining agreement, loan
8
agreement, agreement guaranteeing the obligations of
liabilities of others, construction or building
modification agreement, or any other agreement, contract or
commitment relating to its operation, condition (financial
or otherwise), liabilities, assets, earnings, working
capital or the prospects of the WSB Business and which
provides for future payments or receipts for any
consecutive twelve month period in an amount of at least
$25,000 (or, with respect to purchase orders, $25,000);
(ii) The enforceability of the agreements,
contracts, commitments and licenses referred to in Schedule
3.7 or Schedule 3.10 will not be affected in any manner by
the execution and delivery of this Agreement, the Related
Instruments or the consummation of the transactions
contemplated hereby, except for the need to obtain the
consents and those consents set forth in Schedule 3.11, all
of which consents have been obtained except for those
consents indicated on the Schedule for certain leases of
equipment;
(iii) No outstanding purchase contract or
commitment of WSB relates to any business other than the
WSB Business, is materially in excess of the ordinary and
usual requirements of such business at the time entered
into or, to the knowledge of WSB and the Stockholder, was
entered into at a price or prices materially in excess of
the price paid or payable by WSB during the nine months
ended September 30, 1996 or the year ended December 31,
1995, comparing where applicable prices paid or payable for
similar quantities;
(iv) Neither WSB nor the Stockholder is a party to
or bound by any outstanding agreement, arrangement or
contract relating to the WSB Business or the assets of WSB
with any of the officers, employees, agents, consultants,
advisors or salesmen of WSB or a trustee of the Stockholder
that (A) is not cancelable by it on
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notice of not longer than 30 days and without liability,
penalty or premium, except for those agreements set forth,
along with their expiration dates, on Schedule 3.10, or (B)
provides for the payment of any bonus or commission based
on sales or earnings, other than the "Plans" listed on
Schedule 3.17 and as permitted under Section 3.16;
(v) WSB is not a party to or bound by any
employment agreement, consulting agreement or any other
agreement which contains any severance or termination pay
liabilities;
(vi) To the knowledge of WSB and the Stockholder,
WSB is not in default under or in violation in a material
respect of, nor, is there any basis for any valid claim of
default under or violation of, in a material respect, any
contract, agreement or commitment made or obligation of WSB
or relating to the WSB Business, including, but not limited
to, any material distribution agreement, sales
representative agreement or dealer agreement;
(vii) WSB does not have any (A) indebtedness for
borrowed money or the deferred purchase price for property,
including guarantees of, or agreements to acquire, any such
indebtedness of others, or (B) contracts, commitments or
arrangements for the borrowing of money or for a line of
credit; and
(viii) None of the Stockholder, any "Affiliate" of
the Stockholder (meaning any person controlling or
controlled by Stockholder), WSB and any officer or director
of WSB is a party to or bound by any agreement or
arrangement for the sale of shares of WSB or (other than in
the ordinary course of business and consistent with past
practice) any of the assets or rights of WSB or of the
Stockholder or for the grant of any preferential rights to
purchase any of the assets or rights of WSB or of the
Stockholder.
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(b) With respect to each contract and agreement listed on
Schedule 3.10 attached hereto, except as set forth therein, (A) it is valid,
binding and in full force and effect and is enforceable by WSB in accordance
with its terms, subject to bankruptcy, insolvency, reorganization and other
laws and judicial decisions of general applicability relating to or affecting
creditors' rights and to general principles of equity; (B) to the knowledge of
the Stockholder and WSB, neither WSB nor any other party thereto is in
material breach of any obligation thereunder; and (C) there does not exist any
material default under, or, to the knowledge of the Stockholder and WSB, any
event or condition which, with the giving of notice or passage of time or
both, would become a breach or default in any material respect under the terms
of such contract or agreement on the part of WSB or on the part of any other
party thereto.
(c) Since September 30, 1996, WSB has not written up the
value of any inventory, or written off as uncollectible any notes or accounts
receivable or any portion thereof, except for write-offs and write-ups in
accordance with GAAP consistently applied; waived any rights of substantial
value; or, to the knowledge of WSB and the Stockholder, omitted to do any act,
or permitted any act or omission to act, which will cause a material breach of
any contract, commitment or obligation, or any breach of any representation,
warranty, covenant or agreement made herein.
3.11. Leases. Schedule 3.11 attached hereto contains an
accurate and complete list of all leases (including all amendments thereof and
modifications thereto, the "Leases") pursuant to which WSB leases real
property and leases providing for rentals of at least $10,000 per annum of
personal property. None of the Leases relate to any property or equipment
owned or leased by the Stockholder or an Affiliate. To the knowledge of WSB
and the Stockholder, WSB is not in default in any material respect with
respect to any of the Leases which would permit the lessor thereunder to
terminate such Lease and no event or condition has occurred which (whether
with or without notice, lapse of time or the happening or occurrence of any
other event) would constitute a default in any
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material respect thereunder, which default would permit the lessor thereunder
to terminate such Lease, increase any of the lessee's obligations or reduce
the lessee's rights thereunder. All Leases are valid, binding and enforceable
in accordance with their respective terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally and are in full force and
effect, and, except for the consents of lessors of personal property set forth
in Schedule 3.11 which consents have been obtained (other than from certain
lessors of personal property on the Schedule designated as lessors from whom
no consent has been obtained), the execution and delivery of this Agreement
and consummation of the transactions contemplated hereby, will not require WSB
or Buyer to procure the consent of any lessor in order for WSB to continue as
lessee thereunder without any additional cost to or Buyer or WSB or a
diminution of lessee's rights thereunder.
3.12. Liabilities. To the knowledge of WSB and Stockholder,
WSB is not, except as set forth in Schedule 3.12, subject to any liabilities
other than (i) those included in the September 30, 1996 Combined Balance
Sheet; and (ii) accounts payable and accrued expenses which have arisen in the
ordinary course of the WSB Business subsequent to September 30, 1996.
3.13. Litigation. Except as set forth on Schedule 3.13
attached hereto, there are no claims, actions, proceedings pending and, to the
knowledge of WSB and the Stockholder, threatened, and to the knowledge of WSB
and the Stockholder, there are no investigations or inquiries in progress,
pending, threatened, against the Stockholder or WSB, that could adversely
affect the Shares, WSB or its assets, or the transactions contemplated hereby;
nor, to the knowledge of WSB and the Stockholder, is there any valid basis for
any such claim, action, suit, proceeding, inquiry or investigation. As a
result of either the lack of a valid basis for, or the availability of an
appropriate defense to, any claims, actions, suits, proceedings, inquiries or
investigations set forth in Schedule 3.13, none of such claims, actions,
suits, proceedings, inquiries or investigations will have a material
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adverse effect on the WSB Business or the Combined Financial Condition or
Combined Results of Operations. Neither Stockholder nor WSB is subject to any
judgment, order or decree entered in any lawsuit or proceeding which has had
or reasonably may have a significant adverse effect on the WSB Business or the
Combined Financial Condition or Combined Results of Operations or the ability
of the Stockholder to effect the sale of the Shares hereunder.
3.14. Permits, Licenses, Etc . To the knowledge of WSB and
the Stockholder, WSB does not require any permits, licenses, orders or
approvals of governmental or administrative authorities (collectively the
"Permits") to permit it to carry on the WSB Business as presently conducted
(including, without limitation, those required under federal, state or local
laws or regulations relating to pollution or protection of the environment)
other than the Permits which they currently hold, all of which are described
in Schedule 3.14. The conduct by WSB of the WSB Business through the Closing
has not, and, to the knowledge of WSB and Stockholder, the continuation of
such business by WSB under the control of Buyer after the Closing in the same
manner as currently conducted will not, violate or infringe, and has not
caused and, to the knowledge of WSB and the Stockholder, will not cause, a
default in any material respect under any of the Permits or require WSB or the
Buyer to obtain any additional Permits, and neither the Stockholder nor WSB
has received any written notification of any threatened suspension or
cancellation of any of the Permits which might be reasonably expected to have
a material adverse effect on the WSB Business or the Combined Financial
Condition or Results of Operations.
3.15. Taxes. WSB has: (i) filed all returns required to be
filed with respect to all federal, state, local and foreign income, payroll,
withholding, excise, sales, use, real and personal property, use and
occupancy, business and occupation, mercantile, real estate, capital stock and
franchise or other tax (all the foregoing taxes, including interest and
penalties thereon and including estimated taxes thereof, are hereinafter
collectively referred to as "Taxes"), (ii) paid all Taxes required
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by law to be paid, and (iii) paid all other Taxes for which a notice of
assessment or demand for payment has been received, except, with respect to
all of the foregoing, to the extent that any claimed tax, fee, interest,
assessment or penalty is not due or is being contested in good faith. No
reserve is or will be required of WSB with respect to any Taxes relating to
the income of WSB through the Closing. WSB has not received any notice of an
examination having been made of WSB's federal income tax returns by the
Internal Revenue Service at least since December 31, 1992. WSB has not agreed
to extend the time of assessment or collection of Taxes and is not a party to
any action or proceeding by any governmental authority for the determination,
assessment or collection of any Taxes. There is no examination pending or, to
the knowledge of WSB or the Stockholder, threatened by taxing authorities
relating to the determination, assessment or collection of any Taxes from WSB.
3.16. Absence of Certain Changes or Events.
(a) Since September 30, 1996:
(i) WSB has not sold or suffered any material
adverse change or loss or termination of or breach or
default of any of the Business Rights set forth or referred
to on the Schedules to this Agreement and there has been no
material adverse change, or, to the knowledge of WSB and
the Stockholder, is any material adverse change threatened
or anticipated, in the combined net sales of WSB and
Battery Network and the Combined Financial Condition
Combined Results of Operations from the amounts reflected
on the September 30, 1996 Balance Sheet and the Combined
Statement of Income for the nine months then ended or, to
the knowledge of WSB and the Stockholder, in the prospects
for the WSB Business, and WSB and the Stockholder do not
know of any event which is or might reasonably be expected
to have a material adverse effect on such combined net
sales, Combined Financial Condition or Combined Results of
Operations or prospects;
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(ii) Neither WSB nor the Stockholder has permitted,
allowed or suffered any of its assets (tangible or
intangible) to be subjected to any mortgage, pledge, lien,
encumbrance, restriction or charge of any kind; and WSB has
not canceled any material indebtedness (individually or in
the aggregate) owing to it or waived any claims or rights
of substantial value; or sold, transferred or otherwise
disposed of any of its property or assets (tangible or
intangible) except in the ordinary course of business and
consistent with past practice;
(iii) WSB has not paid, loaned or advanced any
amount to, or sold, transferred or leased any properties or
assets (tangible or intangible) to, or entered into any
agreement or arrangement with, any of its officers,
directors or employees or those of Battery Network or
Enterprises, or increased the compensation to its officers
and employees at rates exceeding the rates of compensation
paid during the nine months ended September 30, 1996;
(iv) WSB has not experienced any material labor
dispute or difficulty;
(v) WSB has not made capital expenditures or
commitments for additions to property, plant, equipment or
for any other purpose which are more than Twenty-five
Thousand Dollars ($25,000) in the aggregate; or suffered
any casualty loss or losses with respect to its assets
(whether or not insured against) which in the aggregate
exceed Twenty-Five Thousand Dollars ($25,000).
3.17. Employee Benefit Plans; ERISA.
(a) Except for the profit-sharing, medical, and health
plans set forth on Schedule 3.17, WSB does not maintain, administer or
otherwise contribute to any Employee Benefit Plan, as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
which is subject to any provision of ERISA and covers any employee, whether
active or
15
retired ("Employee Plans"). None of the Employee Plans set forth on Schedule
3.17 is a "multi-employer plan," as defined in Section 3(37) of ERISA, and WSB
has not been obligated to make a contribution to any Employee Plan within the
past five years on behalf of any employee. Except for those which will be
terminated or canceled on or prior to the Closing. Other than the Stockholder
which will be terminated within six months from the Closing, WSB does not
maintain any form of current or deferred compensation (other than base salary
and base wages), bonus, incentive compensation, profit sharing, severance,
stock option, stock appreciation right, separation pay, retirement, pension,
salary continuation, group or individual health, dental, medical, life
insurance, survivor benefit or similar plan, policy or arrangement for the
benefit of any employee, whether active or retired, of any class or classes of
its employees ("Benefit Arrangements"). Stockholder has provided or caused to
be provided to Buyer (i) a copy of each Employee Plan and Benefit Arrangement,
including the Stockholder, and of each of the documents (including trust
agreements and other funding arrangements and summary plan descriptions) under
which each such Employee Plan and Benefit Arrangement is operated; (ii) the
most recent annual report, if any, required to be filed with the government or
any agency thereof; (iii) with respect to any Employee Plans which are
intended to be qualified under Section 401(a) of the Code, a copy of the most
recent determination letter from the Internal Revenue Service on the Plan's
qualified status and a copy of the application for such letter; and (iv) a
schedule showing either the annual cost or the current value of all benefits
of each Employee Plan and Benefit Arrangement. With respect to all Employee
Plans and Benefit Arrangements, WSB is in compliance in all material respects
with the terms of each such plan or arrangement and, to the knowledge of WSB
and the Stockholder, with the requirements prescribed by any and all Laws as
defined in Section 3.19 currently in effect, including but not limited to
ERISA and the Code, applicable to such plans or arrangements. Since December
31, 1995, the Employee Plans and Benefit Arrangements have not been amended
nor, except pursuant to their terms as in effect
16
on December 31, 1995, have any payments or contributions been made under such
Plans or Arrangements. Since December 31, 1995, WSB has not failed to make any
contribution to, or pay any amount due and owing as required by applicable law
or by the terms of, any Employee Plan or Benefit Arrangement. The obligations
of WSB with respect to any Employee Plan and Benefit Arrangement is fully
funded. There is no pending or, to the knowledge of WSB or the Stockholder,
threatened legal action, proceeding or investigation against WSB or any
Employee Plan or Benefit Arrangement, including the Stockholder, with respect
to the employees of WSB, other than routine claims for benefits, which could
result in liability to such plans or WSB. The execution of this Agreement and
the consummation of the transactions contemplated hereby will not result in
any payment (whether of separation pay or otherwise) becoming due from WSB to
any current or former consultant or employee of WSB or will result in the
vesting, acceleration of payment or increase in the amount of any benefit
payable to or in respect of any such current or former consultant or employee
of WSB.
(b) The Stockholder has complied with all Laws, not limited
to ERISA and the Code, and regulations thereunder, in connection with its
administration and operation and the transactions contemplated by this
Agreement except to the extent that any failure to comply will not result in
any loss, liability, expense or claim against WSB, Buyer or any subsidiary of
Buyer.
3.18. Insurance. WSB has had, for at least since December
31, 1992, and WSB now has, in full force and effect, insurance against fire,
liability, and other claims set forth in Schedule 3.18 hereto in amounts and
against such losses and risks as therein set forth. Policies for such
insurance, as is shown on such Schedule are in effect on the date of this
Agreement, are sufficient for compliance with all requirements of law and of
all agreements with respect to the operation of WSB and the WSB Business and
are valid, outstanding and binding policies and the coverage provided thereby
with
17
respect to any act or event occurring on or prior to the Closing will not in
any way be affected by or terminate or lapse by reas n of this Agreement or
the transactions contemplated by this Agreement.
3.19. Compliance with Applicable Law. Except as set forth
in Schedule 3.19 attached hereto: (a) WSB and the Stockholder have, through
the Closing, complied in all material respects with respect to its operations,
practices, real property, plants, structures, machinery, equipment, vehicles
and other property, and all other aspects of its business, with all applicable
laws (whether statutory or otherwise), rules, regulations, orders, ordinances,
judgments, decrees, orders, writs and injunctions of all governmental
authorities (federal, state, local, foreign or otherwise) (collectively,
"Laws"), including, but not limited to, all Laws relating to the safe conduct
of business, environmental protection and conservation, antitrust, taxes,
consumer protection, currency exchange, equal opportunity, health, sanitation,
fire, zoning, building, occupational safety, pension, securities, trademark
and copyright to the extent that failures to comply in the aggregate have not
and will not result in a loss, liability or expense to WSB, except where the
failure or failures to comply would not have in the aggregate a materially
adverse effect on the WSB Business or its prospects or the Combined Financial
Condition or Combined Results of Operations; and (b) neither WSB nor the
Stockholder has received notification which is currently outstanding or
uncured of any asserted present or past failure to so comply. There has not
been any storage, generation, manufacture, refinement, transportation,
production, treatment or disposal of solid wastes, toxic wastes or hazardous
wastes or substances by WSB or, to the knowledge of WSB and the Stockholder,
at the real properties leased or owned by WSB in violation of any applicable
Law or Permit or which would require significant remedial action under any
applicable Law or Permit. There has never been any spill, discharge, leak,
emission, injection, escape, dumping or any other release by WSB of any kind
onto any real property into the environment surrounding such real properties
of any solid wastes, toxic wastes or hazardous wastes or substances as such
terms are defined under any law.
18
3.20. No Consents. No consent, authorization, approval,
order, license, certificate or permit of or from, or declaration or filing
with, any federal, state, local or other governmental authority or any court
or other tribunal, and no consent or waiver of any party to any distribution
agreement, sales representative agreement, dealer agreement, or any other
contract, agreement, instrument or lease to which WSB or the Stockholder is a
party, is required for the execution, delivery or performance of this
Agreement or any of the Related Instruments by WSB or the Stockholder, as
applicable, or the consummation by such party or parties of the transactions
contemplated hereby or thereby, except for those written consents set forth on
Schedules 3.10 and 3.11, all of which have been obtained by WSB or the
Stockholder, except as indicated on Schedule 3.11.
3.21. Full Disclosure. No representation or warranty of WSB
and the Stockholder made in this Agreement, the Related Instruments or any
written statement furnished to the Buyer pursuant hereto or the Related
Instruments or Closing Documents contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statements or facts contained herein or therein not materially
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
To induce WSB and the Stockholder to enter into this
Agreement and consummate the transactions contemplated hereby, Buyer
represents and warrants to WSB and the Stockholder as follows:
4.1. Organization and Qualification. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware.
4.2. Authorization of Agreements. This Agreement and the
Closing Documents have been duly executed and delivered by Buyer and
constitute the valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, except as such enforceability may be
19
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
except to the extent that the remedy of specific enforcement or injunctive
relief is subject to the discretion of the court before which any proceedings
therefor may be brought.
4.3. Authority to Buy. Buyer has all requisite corporate
power and authority: (i) to execute, deliver and perform this Agreement, and
(ii) to carry out the transactions contemplated hereby and thereby. All
necessary corporate proceedings of Buyer have been duly taken to authorize the
execution and delivery of this Agreement by Buyer and the performance of the
transactions contemplated hereby.
4.4. No Consents. No consent, authorization, approval,
order, license, certificate or permit of or from, or declaration or filing
with, any federal, state, local or other governmental authority or any court
or other tribunal, and no consent or waiver of any party to any agreement to
which Buyer is a party, is required for the execution, delivery or performance
by Buyer of this Agreement.
4.5. No Violation. The execution and delivery and
performance of this Agreement and the Closing Documents do not, with or
without the giving of notice and/or the passage of time, violate any
provisions of law applicable to the Buyer or conflict with, result in the
breach or termination of, any provision of, constitute a default under, or
give any party, other than the Buyer, the right to accelerate any obligation
under, the Buyer's certificate of incorporation, as amended or by-laws, as
amended, or any indenture, mortgage, deed of trust, lease or other agreement
or instrument to which Buyer is a party. The execution, delivery and
performance and compliance by the Buyer with the terms and provisions hereof
do not and will not violate any provision of the General Corporation Law of
Delaware or any other laws or, with or without the giving of notice and/or the
passage of time, conflict with or result in a material breach of any judgment,
order, injunction, decree, regulation or
20
ruling of any court or other governmental authority to which the Buyer is
subject or by which any of the assets of the Buyer may be bound.
4.6. Litigation. There are no claims, actions, proceedings,
pending or in progress, or, to the knowledge of Buyer, threatened, and, to the
knowledge of the Buyer, there are no investigations or inquiries in progress,
pending, or threatened, against the Buyer, that could affect Buyer, or the
transactions contemplated hereby; nor, to the knowledge of the Buyer, is there
any valid basis for any such claim, action, suit, proceeding, inquiry or
investigation.
4.7. Securities Law Disclosures. Buyer has filed all forms,
reports, statements, or other documents required to be filed by Buyer with the
Securities and Exchange Commission ("SEC") and NASDAQ/ NMS, including, without
limitation: (a) its Registration Statement or Form S-1 as declared effective
by the SEC on Xxxxx 0, 0000, (x) its Quarterly Reports on Form 10-Q for the
quarters ended April 30, 1996, June 30, 1996 and September 30, 1996, (c) all
reports on Form 8-K and (d) all amendments and supplements to all such reports
and registration statement (collectively, the "Buyer SEC Reports"). As of the
respective filing dates, the Buyer SEC Reports complied as to form in all
material respects with the requirements of the Securities Exchange Act of 1934
(the "Exchange Act") or the Securities Act of 1933 (the "Securities Act"), as
applicable. The Buyer SEC Reports did not at the time they were filed contain
any untrue statement of material fact, or omit to state a material fact
required to be stated therein that was necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.8. Full Disclosure. No representation or warranty of
Buyer made in this Agreement or any written statement furnished by the Buyer
to WSB or the Stockholder pursuant hereto or the Closing Documents contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements or facts contained
herein or therein not misleading.
21
ARTICLE V
CERTAIN ADDITIONAL AGREEMENTS
5.1. Retention of Trustee; Liquidation of Stockholder.
Buyer will not change or cause a change any of the trustees of the Stockholder
for a period of not less than sixty days from the Closing. The Buyer agrees to
cooperate with the Trustees of the Stockholder in their efforts to promptly
distribute the assets (which shall consist solely of cash) and liquidate the
Stockholder, including, inter alia, the execution and filing of appropriate
forms as may be required by the Stockholder, the obtaining of an updated fair
market valuation with respect to the participation of the Stockholder in the
transaction contemplated by this Agreement, and the application for a
favorable determination letter from the Internal Revenue Service regarding the
termination of the Stockholder, provided however, that neither the Buyer nor
any of its subsidiaries shall incur any liability, claim, expense or financial
obligation in effecting such cooperation.
5.2. Transfer Taxes. Buyer shall pay all transfer taxes
payable with respect to the transfer by the Stockholder to the Buyer of the
Shares.
5.3. Resignations. Stockholder is hereby delivering to
Buyer the resignations of all the Directors of WSB effective upon the Closing.
ARTICLE VI
REMEDIES
6.1. Survival of Representations and Warranties. The right
of a party to maintain any proceeding or action against another party hereto
based on a breach of a representation and warranty or default of a covenant in
this Agreement or pursuant hereto made by any party shall survive the Closing
for a period of two years except for (i) with respect to representations and
warranties with respect to Taxes and under Section 3.17(b) which shall survive
for the applicable statute of limitations and (ii) such right shall survive
any investigation made at any time by or on behalf of any other party.
22
6.2. Indemnification by the Stockholder. Subject to Section
6.6, the Stockholder agrees to indemnify, defend and hold harmless Buyer and
its controlling persons and controlled persons (including WSB), successors and
assigns (hereinafter in this Article VI collectively referred to as Buyer
unless the context otherwise indicates) from and against any and all claims,
demands, losses, costs, obligations, liabilities, interest thereon, penalties
and expenses, including reasonable attorneys' fees and expenses (all the
foregoing being hereinafter sometimes collectively referred to as "Article VI
Damages") occasioned by, arising out of or resulting from any breach or
default of any of the representations and warranties of WSB or the Stockholder
or of the covenants of WSB or the Stockholder in this Agreement, the Related
Instruments or in any Exhibit or Schedule to, or any certificate, agreement
or other instrument furnished pursuant to, this Agreement or the Related
Instruments or any facts or circumstances constituting such a breach or
default.
6.3. Indemnification by Buyer. Subject to Section 6.6,
Buyer agrees to indemnify, defend and hold harmless the Stockholder and its
respective successors and assigns from and against any and all Article VI
Damages occasioned by, arising out of or resulting from any breach or default
of any of the representations, warranties or covenants of Buyer contained in
this Agreement or a Related Instrument or in any Exhibit or Schedule to, or
any certificate, agreement or other instrument furnished pursuant to, this
Agreement or a Related Instrument or any facts or circumstances constituting
such breach or default.
6.4. Claims for Indemnification. A party seeking
indemnification for Article VI Damages (the "Indemnified Party"), as a
condition of asserting claims for indemnification, shall notify the other
party (the "Indemnifying Party") in writing of any event, or of any facts,
which, in its opinion, entitle or may entitle the Indemnified Party to
indemnification under this Article VI. The notice from the Indemnified Party
shall specify all facts then known to it relating to its claim for
indemnification and the amount or estimated amount of the liability arising
therefrom. The right of
23
the Indemnified Party to indemnification and the amount or the estimated
amount thereof, as set forth in the notice, shall be deemed agreed to by the
Indemnifying Party unless, within 30 days after the mailing of such notice,
the Indemnifying Party notifies the Indemnified Party in writing that it
disputes the right of the Indemnified Party to indemnification as set forth or
estimated in the notice or that the Indemnifying Party elects to defend, in
the manner provided in Section 6.5 hereof, the claim giving rise to such
indemnification right. If the Indemnified Party shall be duly notified that
the Indemnifying Party disputes such claim as aforesaid, the parties shall
endeavor to settle and compromise such dispute but no such settlement or
compromise shall be effected without the consent of both. If unable to do any
of the foregoing, such dispute as to indemnification shall be determined by
appropriate litigation (which shall mean when the claim has been finally
determined by a court or tribunal from which determination no appeal is or may
be taken or when the defense thereto has been abandoned); and any right of an
Indemnified Party to indemnification established by reason of such settlement,
compromise, or litigation shall be promptly thereafter paid and satisfied by
the Indemnifying Party.
6.5. Right to Defend. If the facts giving rise to
indemnification shall involve any actual or threatened claim or demand by any
other third party against an Indemnified Party, the Indemnified Party may upon
written request require the Indemnifying Party, at the expense of the
Indemnifying Party through counsel of its own choosing, to defend or prosecute
such claim or demand in the name of the Indemnified Party, as the case may be,
(without prejudice to the right of the Indemnified Party to participate
through counsel of its own choosing at its own expense). The Indemnified Party
shall cooperate in the defense or prosecution of said claim or demand,
including providing the Indemnifying Party with access to such books and
records of the Indemnified Party in the possession of the Indemnified Party,
which shall be reasonably deemed by the Indemnifying Party to relate to said
claim or demand, and shall be entitled to be reimbursed, as provided in
Sections 6.2, 6.3 or 6.7, for all costs and expenses incurred by it in
connection therewith. No settlement shall be
24
effected by an Indemnified Party to which it may claim indemnification from an
Indemnifying Party without the consent of the Indemnifying Party but such
consent shall not be unreasonably withheld.
6.6. Limitations. Except for Article VI Damages arising
with respect to Section 3.17(b) (hereafter referred to as "Unlimited
Damages"), neither the Stockholder nor the Buyer, as the case may be, will be
obligated to indemnify, defend or hold the other party harmless with respect
to any Article VI Damages asserted by it until such damages exceed the sum of
$50,000 in the aggregate (the "Threshold") and then indemnification shall be
to the extent of all Article VI Damages, above the Threshold amount. In
determining the Threshold, there should be included, with respect to the
Stockholder's obligations hereunder, all damages under Article VII of the BN
Stock Agreement (other than Unlimited Damages as defined in that agreement)
and all damages under Article VII of the Enterprises Asset Agreement (other
than Unlimited Damages as defined in that agreement), suffered by the Buyer
(collectively, along with the Article VI Damages hereunder, other than
Unlimited Damages, hereinafter referred to as the "Buyer's Aggregate
Damages"). In no event shall the Buyer's Aggregate Damages for purposes of
indemnification of the Buyer exceed a limit (the "Damages Limit") of
$3,000,000 plus the shares of Common Stock of the Buyer and options to
purchase shares of Common Stock of the Buyer issued to the BN Stockholders
pursuant to the Battery Network Stock Agreement (such shares and options
collectively referred to as the "Equity Portion of the Damages Limit"). The
Stockholder agrees that payment of the Unlimited Damages shall be in cash and
that the Buyer's Aggregate Damages shall be sought first from the BN
Stockholders and then from Enterprises and the Enterprises Stockholders before
Buyer requires payment from the Stockholder of Article VI Damages, with the
cash payments of Buyer's Aggregate Damages pursuant to the BN Stock Agreement
and the Enterprises Asset Agreement to be credited to the Buyer's Aggregate
Damages. In no event shall Buyer require the Stockholder to make payment of
the Equity Portion of the Damages Limit.
25
6.7. Litigation; Remedies Cumulative. In the event of
litigation to enforce this Agreement or any provision thereof, the prevailing
party, in addition to any other relief such party may be awarded, shall be
entitled to recover its reasonable attorneys' fees, including those incurred
with respect to any appellate proceeding. Except as herein expressly provided,
all remedies provided in this Agreement, including, but not limited to, those
pursuant to and Articles VI and VII, shall be cumulative and shall not
preclude assertion by any party hereto of any other rights or the seeking of
any other remedies against any other party hereto.
ARTICLE VII
MISCELLANEOUS
7.1. Expenses. Each party hereto shall pay its own expenses
incidental to the negotiation, preparation and consummation of this Agreement,
the Related Instruments and Closing Documents and all other agreements
executed and delivered by it hereunder or in connection herewith and the
transactions provided for herein and therein, including all fees and expenses
of its or their respective counsel and accountants, except that the fees and
expenses of Deloitte & Touche LLP for its services in auditing and reviewing
the Audited Financial Statements of WSB, Battery Network and Enterprises
provided pursuant to this Agreement shall be borne by Buyer.
7.2. Further Actions. At any time and from time to time
after the Closing, each party hereto agrees, at its own expense (except as
otherwise provided herein), to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of
this Agreement.
7.3. Commissions and Finders' Fees. Except for the fee of
Founders Management Services, Inc. ("Founders"), which shall be the sole
responsibility of Buyer, each of the parties represents that it has not
incurred any liability to any broker, finder or agent for any brokerage fees,
finder's fees or commissions with respect to the transactions contemplated by
this Agreement, which
26
may be directly or indirectly asserted against the other parties. Buyer agrees
to be fully responsible to pay all fees due to or claims of Founders and to
indemnify and hold WSB and Stockholder harmless from and against all
liability, loss, cost, charge or expense, including reasonable counsel fees,
arising from claims of Founders for any fee or commission with respect to the
transactions contemplated by this Agreement or pursuant to all outstanding
agreements between Founders and Buyer.
7.4. Knowledge of WSB. The "knowledge of WSB" shall mean
the knowledge of its directors and its executive officers and its employees
with managerial responsibilities.
7.5. Injunctive Relief. The Buyer and the Stockholder
acknowledge and agree that in view of the uniqueness of the Shares and the WSB
Business, damages at law would be insufficient for breach of any of their
respective covenants in this Agreement. Accordingly, the parties hereto agree
that in the event of a breach or threatened breach of any provisions of this
Agreement, the Buyer or the Stockholder, as appropriate, shall be entitled to
equitable relief in the form of an injunction to prevent irreparable injury
without being required to provide any security or post any bond. Nothing
herein shall be construed as prohibiting any party hereto from pursuing any
remedies, including damages, for breach or threatened breach of this
Agreement.
7.6. Further Assurances. Each party hereto shall, from time
to time after the Closing, at the request of any other party hereto and
without further consideration, execute and deliver such other instruments of
conveyance, assignments, transfer and assumption, and take such other actions
as such other party may reasonably request to more effectively consummate the
transactions contemplated by this Agreement.
7.7. Reformation and Severability. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof:
27
(a) in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable; and
(b) the legality, validity and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby.
7.8. Entire Agreement; Modification. This Agreement, the
Related Instruments and the Exhibits hereto set forth the entire understanding
of the parties with respect to the subject matter hereof, supersede all
existing agreements and understandings between them (and all prior
representations and warranties) concerning such subject matter and may be
modified only by a written instrument duly executed by each party hereto.
7.9. Notices. Any notice given pursuant to this Agreement
to any party hereto shall be deemed to have been duly given (i) when mailed by
registered or certified mail, return receipt requested, (ii) when telecopied,
provided a copy of the notice is mailed by registered or certified mail,
return receipt requested, within one business day following the date of the
telecopied transmission, or (iii) when hand delivered to the party to whom it
is to be given at the address of such party set forth below, as follows:
28
If to the Stockholder at its address set forth in the first
paragraph of this Agreement:
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx, P.C.
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-000
Attention: Xxxxxxx X. Xxxxx, Esq.
FAX: (000) 000-0000
If to Buyer:
Batteries Batteries, Inc.
c/o Founders Equity, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
Chairman of the Board
FAX: (000) 000-0000
with a copy to:
Xxx Xxxxxxxxxxx, Esq.
Brock, Fensterstock, Xxxxxxxxxxx, XxXxxxxxx & Xxxx, LLC
Citicorp Center, 56th Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
FAX: (000) 000-0000
If to WSB, c/o Buyer, with a copy to Xxx Xxxxxxxxxxx, Esq.
or at such other address as a party shall from time to time designate by
written notice, in the manner provided herein, to the other parties hereto.
7.10. Waiver. Any waiver must be in writing, and any waiver
by any party of a breach of any provision of this Agreement shall not operate
as or be construed to be a waiver of any other breach of that provision or of
any breach of any other provision of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or more
occasions will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
29
7.11. Binding Effect; Assignment. The provisions of this
Agreement shall be binding upon and inure to the benefit of WSB, the
Stockholder and the Buyer and their respective heirs, representatives,
successors and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties, and any
purported assignment without such consent shall be void, except that (A) the
Buyer may assign this Agreement to any corporation in which it owns 100% of
the outstanding shares of voting stock and agrees to be bound by the
provisions of the Agreement, provided that Buyer guaranties the obligations of
the assignee, and (B) the Buyer may collaterally assign its rights under this
Agreement to IBJ Xxxxxxxx Bank & Trust Company ("IBJ") as Agent and Lender
under the Revolving Credit, Term Loan and Security Agreement among Buyer, WSB,
subsidiaries of Buyer and IBJ as Agent and Lender.
7.12. No Third-Party Beneficiaries. Except for rights of
Indemnified Parties under Article VI hereof, the rights of the parties under
the Related Instruments or permitted assignees under Section 7.11, this
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement.
7.13. Headings. The headings in this Agreement are solely
for convenience of reference and shall be given no effect in the construction
or interpretation of this Agreement.
7.14. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
7.15. Governing Law. This Agreement and all amendments
thereof shall be governed by, and construed in accordance with, the internal
laws of the State of Delaware applicable to contracts made and to be performed
entirely within the state, without giving effect to the principles of conflict
of laws which may be applied thereby. Service of process on Buyer, WSB and
30
Stockholder, as the case may be, in any action arising out of or relating to
this Agreement shall be effective upon Buyer, WSB or the Stockholder, as the
case may be, if mailed to the address listed in Section 7.9 hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first written above.
BATTERIES BATTERIES, INC.
By: /s/ Xxxx Xxxxxx
----------------------------------------
W. S. BATTERY & SALES COMPANY, INC.
By: /s/ Xxxxxxx Xxxx
----------------------------------------
, President
W.S. BATTERY & SALES CO. INC.
EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST:
/s/ Xxxxxxx X. Xxxx
-------------------------------------------
Xxxxxxx X. Xxxx, Trustee
/s/ Xxxxxxx Xxxx
-------------------------------------------
Xxxxxxx Xxxx, Trustee
31
EXHIBITS
A Opinion of Counsel to WSB and Stockholder
A-1 Opinion of Buyer's Counsel
SCHEDULES
Sections
3.6 Tangible Assets
3.7 Intangible Assets
3.8 Books and Records
3.10 Contracts and Commitments
3.11 Leases
3.12 Liabilities
3.13 Litigation
3.14 Permits, Licenses, Etc.
3.15 Tax Examinations
3.17 Employee Benefit Plans, ERISA
3.18 Insurance
3.19 Compliance with Applicable Law
32
STOCK PURCHASE AGREEMENT AMONG
BATTERIES BATTERIES, INC. BATTERY NETWORK, INC.
AND THE BATTERY NETWORK STOCKHOLDERS
SCHEDULE 3.6
Tangible Assets: None
SCHEDULES 3.7
Intangible Assets:
Pending trademark "Absolute"
Registered trademark - "Battery Network"
SCHEDULE 3.10
Contracts and Commitments
A. Manufacturer/Representative Agreements between Absolute Battery and:
Xxxxx Marketing, Inc. for Alaska, Washington, Western Oregon, Western
Montana and Western Idaho, commencement 7/12/95
Marketing Services of Kansas for Iowa, Nebraska, Missouri and Kansas,
except Intelligent Electronics and Inacom, commencement 9/1/95
New Horizons for Illinois and Wisconsin, commencement 2/23/95
New Era Sales for Northern NJ and New York, commencement 5/17/95
Xxxxxxxxx Xxxxx Services for Florida except Tech Data, commencement 2/7/95
TCG, The Connection Group Inc. for Texas, Oklahoma, Louisiana, Arkansas
except Daisytek and CompuCom, commencement 9/1/95
Pioneer Marketing for New England, upstate New York, southern Connecticut
state line to northern Maine west to New York except MacWarehouse,
commencement 2/1/96
Xxx Brake & Associates for Colorado, Utah, Idaho, Wyoming and Montana,
commencement 12/7/95 - Note says there is an Addendum adding Arizona,
New Mexico and Southern Nevada
Incremental Sales for Northern California, except Van Star, Momentum and
MicorSystems, and Northern Nevada
B. Agreement Between Burlington Northern Railroad Company, the Xxxxxxxx, Topeka
and Santa Fe Railway and Battery Network made on September 1, 1996 through
November
C. Distributor Agreements Between Battery Network, Inc., Absolute Battery
Co. and the following distributors:
Absolute Battery Canada, Inc./Battery Network Canada/Xxxxxxx Xxxxxx Ind.
for the territory of Canada and Cuba
Absolute Battery UK LTD/Battery Network Europe LTD./Xxxxxx Xxxx Ind. for
the United Kingdom and the European Economic Community ("EEC")
SCHEDULE 3.10 CONTINUED...
D. Summaries of XxXxxxx Agreements with:
Xxx Xxxxx
Xxxxxx Xxxxxxx
Xxx Xxxxx
Xxxx Xxxxxx
Xxxx Xxxxx
E. Summaries of New Jersey Agreements with:
Xxx Xxxxxxxx
Xxxxxx Xxxxx
Xxx Xxxxxx
Xxxxx Xxxxxx
Pamco
Xxxx Xxxxxxxx
Greenshed Sales/Xxxx Xxxxxx
Xxxxx Xxxxxxx
Armondro Toral, Jr.
Canada: Contract
U.K.: Contract
Xxxxxx Mocskowicz
F. Summaries of San Diego Verbal Sales Agreements with:
Xxx Xxxxxxxxxx
Xxxx Xxxxx
PJH Sales and Marketing Inc. (Xxx Xxxxxxx)
Xxxxxx Xxxxx
Xxx Xxxxxxx
SCHEDULE 3.11
Lease Equipment:
Telephone system in North Branch, New Jersey
Commencement 6/6/94; term 60 months; monthly rental payment $1,022.30
Additional payment of $61.09 per month for 800 GS/LS Module
One Yale Sit Down Electric Forklift
SCHEDULE 3.12
Liabilities -- None
SCHEDULE 3.13
Litigation:
Blenheim Group, USA, Inc. vs. Battery Network
SCHEDULE 3.14
Permits -- Licenses
California -- Sellers Permit, California City of Escondido
New Jersey -- Sales and Use Tax Recycling Permit
Illinois -- Illinois Department of Revenue
Washington -- Certificate of Coverage -- Master License
License Agreement -- De Pew Engineering Inc.
SCHEDULE 3.17
Employee Benefit Plan:
Alexander Battery Co. East, Inc. Specimen Profit Sharing Plan Adoption
Agreement and Alexander Battery Co. East, Inc. Specimen Profit Sharing
Plan & Trust
Alexander Battery Co. West, Inc. Specimen Profit Sharing Plan & Trust
Alexander Battery Co. South, Inc. Specimen Profit Sharing Plan Adoption
Agreement and Alexander Battery Co. South, Inc. Specimen Profit Sharing
Plan & Trust
W.S. Battery & Sales Co., Inc. Employee Stock Ownership Plan and Trust and
W.S. Battery & Sales Co., Inc. Specimen Money Purchase Pension Plan & Trust
Battery Network, Inc. Specimen Profit Sharing Plan Adoption Agreement and
Battery Network, Inc. Specimen Profit Sharing Plan & Trust
SCHEDULE 3.18
Insurance:
Insurance Company Policy No. State Type of Insurance
----------------- ---------- ----- -----------------
Xxxxx Xxxx 00-00-0000-0 Xxxxxxxx Business & Liability
State Farm 98-07-3606-4 Washington Business & Liability
State Farm 93-Mo-1343-1 IL, WA, NJ Workers Comp. & Employers
Liability
Met Life 176866 EBPG IL Health/Life
Xxxx. Drier Co. WN96-538430-05 CA Workers Com. & Employers
Liability
Bankers Std. Co. D2 61 19 479 CA Commercial Property & General
Liability
Blue Xxxxxx XX X00000 CA HMO Health Plan
Private MedCare 8634 CA Group Dental Services
Sentry Ins. 44-66422-02-00-961 Commercial Property Liability and
00-00000-00 NJ Umbrella Coverage
Met Life k76892 NJ Health/Life
SCHEDULE 3.19
Compliance with Applicable Law: None
